Targeted Financial Sanctions

Proliferation & Terrorism Financing

www.uaeiec.gov.ae
 Executive Office Mandate
National Leader in the UAE to ensure the
implementations of Targeted Financial Sanctions (TFS)
imposed by the UAE, UN and FATF standards.

Targeted Financial
Sanctions The Authority responsible for
TFS import Export control to Dual-Use
items
UNSC
Resolutions Export Control of
Implementation Dual-use

Focal Authority in the UAE to coordinate

the implementations of all UN imposed
resolutions & sanctions
Overview

■ What are Targeted Financial Sanctions?

■ How to implement the Targeted Financial

Sanctions?

■ How to identify sanction evasions?

Illicit financing from an international perspective

Proliferation
Financing
Terrorist
Financing (PF)
(TF)

Money
Laundering

Executive Office IEC acts a focal point in the UAE to implement

Targeted Financial Sanctions (TFS) by combating (TF) and (PF).
Targeted Financial Sanctions (TFS)
▪ The term Targeted Financial Sanctions mean that such sanctions are
against particular individuals, entities, groups, or undertakings.

▪ The purpose of TFS as follows:

▪ To deny certain individuals, groups, organizations, and entities the means to
support terrorism or finance the proliferation of weapons of mass destruction.

▪ To ensure no funds, financial assets or economic resources of any kind as long as

they remain subject to the sanction’s measures.
United Nation Sanction Framework
▪ United Nations Chapter VII, under Article 41 defines sanctions as
“measures not involving the use of armed force” employed to give effect to
UNSCRs.

▪ Sanction regimes focus mainly on supporting the settlement of political

conflicts, nuclear non-proliferation, and counterterrorism by measures ranged
from comprehensive economic and trade sanctions to more targeted
measures.
United Nation Sanction Framework
▪ Range of sanctions regimes
▪ Targeted sanctions (i.e. focused sanctions)
- Travel bans
- Arms embargoes
- Sectorial sanctions (i.e. Gold - Kongo, Charcoal - Somalia, etc.)
- WMD-related goods and materials
▪ Role of Sanctions Committees and experts
▪ Today, there are 14 ongoing sanctions regimes
▪ UN website (www.un.org) contains details for each regime
The Financial Action Task Force (FATF)
▪ Recommendations 6 and IO 10: Terrorism and its financing.
▪ Recommendation 7 and IO 11: Financing of proliferation of weapons of mass
destruction.

▪ Focus: Financial aspect of the sanction’s regimes

- Asset freeze
▪ Out of scope but with an impact:
- Travel bans
- Arms embargoes
- Sectorial sanctions
- WMD-related goods and materials
UAE Sanctions Legal Framework
▪ UAE Cabinet issued Resolution (74) in 2020
regarding the designated individuals and
Entities.
▪ State the implementation procedures to prevent and counter
financing terrorism and leveraging non-proliferation of
weapons of mass destruction, and the relevant resolutions.

Article - 15 Freezing Funds As per the Sanctions List & Local Lists

State the FI and DNFPBs obligations and necessary actions to

Article - 21
implement the UN and National Sanctions

Article - 22 Obligations of Supervisory Authorities

Article - 24 Administrative Measures

 TFS Framework
Targeted Financial Sanctions Framework Intrnl. Sanctions Regime
As per Cabinet Resolution 74 2020

Targeted Financial Sanctions Other UN Sanctions

As per FATF Recommendations Regime
▪ OFAC
Terrorist Financing (TF) Proliferation Financing (PF) ▪ Somali - UNSCR 1844
▪ Iraq – UNSCR 1483 ▪ EU
▪ Democratic People’s
▪ ISIS & Al-Qaida ▪ Congo – UNSCR 1596 &
UNSCR 1267, 1989
Republic of Korea (DPRK)
UNSCR 1718 (2006) UNSCR 1807 ▪ HMT
▪ Libya – UNSCR 1970
▪ The Taliban ▪ etc
UNSCR 1988
▪ Islamic Republic of Iran ▪ Central African Republic –
UNSCR 2231 (2015) UNSCR 2127
Note: implementation of such
▪ UAE Local Terrorist List ▪ Yemen – UNSCR 2140
sanctions depend on guidance
UNSCR 1373
▪ South Sudan – UNSCR 2206 and instructions issued by
relevant Supervisory Authority
▪ Mali – UNSCR 2374
FATF RECOMMENDATION 7 ▪ Beirut terrorist bombing –
FATF RECOMMENDATION 6
FATF IMMEDIATE OUTCOME 11 UNSCR 1636 & UNSCR 1701
FATF IMMEDIATE OUTCOME 10
▪ Any other UN Sanction Regime
TFS Ecosystem
▪ NAMLCFT: Develop the national strategy for
Supreme Council National combatting AML/CFT and assess the national risks.
NAMLCFT
Security
▪ TF-PF Subcommittee: Propose, develop, and draft
policies, regulations, and internal procedures on
TF-PF Subcommittee Local Listing Committee combating the financing of terrorism, illegal
organizations, and proliferation in coordination with
relevant parties.
Executive Office IEC ▪ Supreme Council National Security: Coordinate with
TFS National Leader Law Enforcement Authorities, the Executive Office,
and the concerned agencies in the State to obtain
information regarding listing of individuals, groups, or
entities that may fulfil the designation criteria, as per a
relevant UNSCRs or the Local Terrorist List.
ADGM

DFSA
MOE

MOJ
SCA
CB

▪ Local Listing Committee: Prepare and propose to the

Cabinet the listing of individuals, groups, or entities in
Supervisory Authorities the Local Terrorist List.

▪ Executive Office IEC: national lead and liaison to

coordinate implementation of TFS with all the federal
FIs & DNFPBs and local government stakeholders including FI &
Private Sector DNFBPs.
UAE Government Authorities Role
Executive Office
▪ Act as a focal point between all the supervisory authorities and other relevant authorities to implement TFS.
▪ Circulate the names of designated entities and individuals by the UN sanctions and UAE Terrorist list.
▪ Ensure implementation and compliance of all supervisory authorities to the UN sanctions and UAE Terrorist
lists in coordination with the Supreme Council of National Security.
▪ Analyze private sector TFS reports and provide feedback incoordination with FIU & Supervisory Authorities.
▪ Increase awareness to the Government and Private sector in regards to Targeted Financial Sanctions (TFS).

Supervisory Authority
▪ Ensure the relevant licensed (FIs & DNFBPs) has sufficient understanding of their obligation in relation to
Targeted Financial Sanctions (TFS) i.e. outreach, training, online guidelines, etc.
▪ Conduct examination to the relevant sector (FIs & DNFBPs) and ensure compliance UAE decisions and
regulations in the field of TFS.
▪ Ensure relevant (FIs & DNFBPs) has proper control for implementation of TFS.

▪ Monitor (FIs & DNFBPs) compliance and prescribe remedial action, as well as enforce appropriate penalties.
Whom Required To Comply
▪ All Financial Institutions (FI) and Designated Non-Financial
Businesses and Professions (DNFBPs) located in the UAE, such
as:
FIs DNFBPs
▪ Banks ▪ Real estate agency
▪ Exchange houses ▪ Dealer in precious metals and stones
▪ Finance companies ▪ Accounting firm, audit firm,
▪ Brokerage firms insolvency firm or taxation consulting
(Securities/Insurance) firm;

▪ Insurance/reinsurance companies ▪ Law firm, notary firm or other

independent legal business;
▪ Asset/Fund managers
▪ Company Service Provider.
The Executive Office Website
The Executive Office has published a comprehensive webpage available in English and
Arabic

Objectives of the website:

▪ Act as a center of knowledge including information &
publication for TFS implementation.

▪ Provide guidance to stakeholders on their obligations.

▪ Allows users to subscribe to receive latest UAE & UN

sanctions updates.

▪ Explain the grievance procedures for any person

affected by freezing measures.

WWW.UAEIEC.GOV.AE
Accessing the Lists
▪ The United Nation Consolidated List and UAE Terrorist List
can be accessed from the Executive Office website
UAEIEC.GOV.AE

▪ Both UN and UAE Terrorist lists are updated periodically by

adding, deleting and amending.

▪ Subscribe to the Executive Office mailing list to receive

updates takes place on the list.
Funds or Other Assets
Definition

▪ Any assets including but not limited to financial assets, economical

resources (including oil and other natural resources), property of
every kind whether its tangible or intangible, moveable or immovable
and legal document or instruments in any form.
▪ For example: real estate, securities, local and foreign currency, bank
credits, deposits, postal drafts, bank drafts, and letters of credit, jewelry
and gold, raw materials, etc.

For more information, please refer to the TFS guideline.

Freezing & Prohibition of Funds
Definition

For any designated person listed in the UAE Terrorist List or by the UN
Security Council Consolidated List, the following should be taken against
identified funds or economic resources owned directly or indirectly:
▪ Freezing
▪ Freeze, without delay (within 24 hrs.) and without prior notice, all the funds owned
directly or controlled by the designated person.

▪ Prohibitions of Funds
▪ To prohibit of any transfer, conversion, disposition, alteration, use, dealing of funds or
economic resources. Which results in:
- Changing in their volume, amount, location, ownership, possession, nature or destination
or that would in any way enable the use of such funds or economic resources for any
purpose.
Freezing & Prohibition of Funds
Overview and examples

Prohibition of making
Freeze Funds
funds available

▪ Gold stored in a vault, Freeze ▪ Buying or selling Real Estate,

the gold, no one can Freeze the transaction and/or
withdraw the gold form the TFS property transfer. If you hold
vault. funds or assets freeze the
transfer of it.
▪ Freeze cash in bank
accounts. ▪ Refrain from offering any
services to a sanctioned
▪ Freeze stocks and bonds person.
▪ Etc. - Real Estate services
- Safe keeping of gold
- Trade in gold
- Trade in stocks, cryptocurrency,
etc.
FI and DNFBPs Main Obligations

At the Executive Office website to receive automated

Register updates to the local & UN lists.

Screen daily their customers, potential customers,

Screening beneficial owners, and transactions to identify possible
matches.

▪ Freeze & prohibition of funds

Implement TFS ▪ Report

Internal ▪ Internal policies and procedures complying with TFS

Controls legislations.
Register and Subscribe
FIs and DNFBPs Main Obligations

▪ The Executive Office of the Committee for Goods Subject to

Import and Export Control to receive automated updates to the
lists.
 Screening
FI and DNFBPs Main Obligations

▪ Conduct screening on existing, new, and potential clients to verify

any positive names matched with any designated person (Entity or
Individual).
▪ Upon a new update to the relevant sanctions list screen your
customer database without delay when new names are listed.
▪ DNFBP’s to perform a review including, but not limited to:
- Purchaser & Seller
- Financial Institutions including Banks
- Insurance and re-insurance
- Shipper and freight forwarders
- Source of the funds whether it was derived from the asset owned or controlled by a
designated person

▪ Upon screening reasonable measure must be taken to verify and

confirm the identity of the customer against the designated person.

Without Delay: Within hours of a designation by UNSCR or UAE Federal Cabinet

Screening
FI and DNFBPs Main Obligations

For natural person For legal persons

▪ Name
▪ Name (s)
▪ Aliases
▪ Aliases
▪ Date of birth
▪ Address of registration
▪ Nationality
▪ Address of branches
▪ ID or passport information
▪ Other information
▪ Last known residency
Screening
FI and DNFBPs Main Obligations

A “Confirmed Match” is when an individual, group, or entity matches most or

Confirmed
Match all of the identifiers published on the Sanctions Lists.

Potential A “Potential Match” is when there is any match between data in the Sanctions
Match Lists with any information in your databases.

A “False Positive” is a potential match to listed individuals, groups, or entities

False
Positive either due to the common nature of the name or due to ambiguous identifying
data, which on examination proves not to be a confirmed or potential match
 Implement TFS
FI and DNFBPs Main Obligations

Freeze Assets Submit FFR Report

Existing Customer Without Delay Via GoAML
Remain in effect until de-listing within 5 days
Confirmed
Match
Submit FFR Report
Potential Customer Reject Customer Via GoAML
within 5 days

When a ‘Confirmed Match’ to a designated individual, group, or entity to the UAE Local Terrorist List or UNSC
Consolidated List is identified, FIs & DNFBPs are required to take the following necessary action:
• Freeze without delay and prohibition of making funds or other assets available or provide services. [You should not close
the accounts as it doesn’t comply with cabinet Resolution 74 to 2020].
• Report measures via the GoAML platform within five business days by selecting the Fund Freeze Report (FFR). The report
will be received by the relevant supervisory authority and the Executive Office – IEC.
• Ensure all the necessary information and documents regarding the ‘Confirmed Match’ is submitted along with the (FFR).
• Freezing measures shall remain in effect until the person is de-listed
 Implement TFS
FI and DNFBPs Main Obligations

Potential Suspend all Transactions Submit PNMR Report

Match Any Customer Without Delay Via GoAML
Remain in effect until instructions received within 5 days

False
Positive Any Customer No Action Required

When a ‘Potential Match’ to a designated individual, group, or entity to the UAE Local Terrorist List or UNSC
Consolidated List is identified, FIs & DNFBPs are required to take the following necessary action:
• Suspend without delay any transaction and refrain from offering any funds or services.
• Report the ‘Potential Match’ via GoAML platform by selecting the Partial Name Match Report (PNMR);
• Ensure all the necessary information and documents regarding the name match is submitted
• Uphold suspension measures related to the ‘Potential Match’ until further instructions are received from Executive
Office – IEC or the relevant supervisory authority.
 Implement TFS - Liability
FI and DNFBPs Main Obligations

• Freezing and suspension measures shall be taken immediately without delay.

• You don’t need any pre-approval from the government authorities to freeze or suspend
upon identifying any confirmed or potential match.

• A person (natural or legal) who, in good faith, freezes funds, or refuses to provide
services or report information in relation to designated individuals, groups or entities in
the UAE Terrorist List or UN consolidated list, shall be exempt from any damages or
claims, resulting from such actions.
Non-Compliance
Violating UAE Cabinet 74 of 2020 can expose the FI or DNFBP to administrative
penalties and criminal prosecutions including:
- Increased scrutiny of future actions from the UAE Government
- Supervisory authority may determine a ban of certain individuals from employment within the
relevant sectors for a period of time.
- A suspension, restriction, or prohibition of activity, business, or profession causes either revocation
or withdrawal of the business license.

Decree Federal Law No. (20) of 2018 on Anti-Money Laundering and Combating the
Financing of Terrorism and Illegal Organizations
- Art. 60. Every natural or legal person shall immediately comply with the instructions issued by the
Competent Authorities in the State concerning the implementation of the resolutions issued by UN
Security Council.

Supervisory measures can be applied regardless of a finding of intent.

Internal Controls
FI and DNFBPs Main Obligations

▪ Must have appropriate internal controls to ensure compliance with the most
recent publication of targeted financial sanctions of the UNSC Consolidated
lists and the Local Lists.

▪ Internal controls and procedures to ensure compliance with the obligations

arising from Cabinet Resolution 74/2020.

▪ Policies and procedures that prohibit staff from, directly or indirectly, informing
the customer or any third party that freezing action or any Other Measures are
going to be implemented as per provisions of Cabinet Resolution 74/2020.
Sanction Evasion
Red Flags TFS - TF

TFS – TF evasion activities could be identified when no confirmed or potential match could be
identified, but the transaction contain doubtful or suspicious information as per the following red
flags:

▪ Customer is engaging in complex commercial deals and arrangements that seem to be aiming to hide the final
destiny of the transaction/good or the beneficial owner, which could be a designated individual, group, or entity. (E.G:
the use of a front company, middlemen, or intermediaries by the designated individual to circumvent the targeted
financial sanctions).
▪ Customer is carrying out multiple ATM cash withdrawals in short succession across various locations in territories
where sanctioned people have influence or around the border of sanctioned countries linked to terrorist financing.
▪ Customer is suspected to be working or acting on behalf of, or is controlled by, a sanctioned individual, group, or
entity.
▪ Pattern of wire transfer activity that shows unusual patterns or has no apparent purpose.
▪ Lack of details regarding reasons for transferring funds.

Reporting entity should submit an STR to the FIU

Sanction Evasion
Red Flags TFS – PF

TFS – PF evasion activities could be identified when no confirmed or potential match could be
identified, but the transaction contain doubtful or suspicious information as per the following red
flags:

▪ Customer or transaction is suspected of being linked (directly or indirectly) to DPRK’s nuclear-related, WMD-
related, or ballistic missiles weapons program.
▪ Customer or transaction is suspected of being linked (directly or indirectly) to IRAN’s nuclear weapons
program.
▪ Customer or transaction is suspiciously involved in the supply, sale, delivery, export, or purchase of dual use,
controlled, or military goods to countries of proliferation concerns or related to illegal armed groups.
▪ Transaction involves sale, shipment, or export of dual use goods incompatible with the technical level of the
country to which it is being shipped.
▪ Trade finance transaction involves shipment route (if available) through country with weak export control laws
or weak enforcement of export control laws.

Reporting entity should submit an STR to the FIU

Sanction Evasion
In UAE & Typologies

Trade in Gold

Country B

Transported
Extracted by
Gold Mine to change
terrorists
the origin

Sanctioned Country A

Buy, refine and

commelize

Country C
Sanction Evasion
In UAE & Typologies

Buying or Selling of Real Estate

Country B

Sanctioned Family Buys/ Sell Real

person member Estate

Country A
Sanction Evasion
In UAE & Typologies

Misuse of an NPO

Buys Real Estate

Terrorist
Holds bank accounts Charity
Organization

Requests donations
 Thank you
For Further Information, Contact us at
[email protected]

www.uaeiec.gov.ae https://is.gd/jIi5zB